RFID Patent War Escalates

By Jacqueline Emigh |
Posted 04-07-2005

The long and bitter intellectual property battle between Intermec Technologies Corp. and Symbol Technologies Inc. raged on this week, as Symbol's chief IP counsel accused Intermec of "embarking on an industry-stifling campaign to enforce and collect RFID royalties." Intermec's chief operating officer countered that Symbol is "trying to beat us into a deal that doesn't make any sense for us."

Intermec COO Steve Winter argued that Intermec's right to collect royalties for its RFID (radio-frequency identification) intellectual property is just as strong as Symbol's right to charge licensing fees for laser scanning and 802.11 wireless patents.

"Intermec has 140 patents. We might give away one or two, but we're not going to give away 140 when we've spent millions and millions of dollars on developing them," Winter said.

"Symbol has a similar investment in laser scanning," he said, "[but] Symbol is unwilling to pay us royalties similar to the ones that [Intermec and other IT vendors] have been paying them. The terms we're offering [Symbol] are reasonable and nondiscriminatory."

Aaron Bernstein, Symbol's chief IP counsel, said that SymbolIntermec's legal adversary in a series of suits and countersuits around RFID, 802.11 and scanning patentsdoesn't take issue with a company's rights to collect royalty fees.

"Symbol has been very vocal, public, and aggressive in its statements. You don't overdo it and stifle an entire industry, [so that] it will be impossible to sell a commercially viable [RFID] product without a license, when this technology hasn't even gotten off the ground yet," Bernstein said.

The lengthy, complicated, and acrimonious legal saga began last summer, when Intermec sued Matrics Inc.a company since acquired by Symbolfor allegedly infringing upon four Intermec patents specifically related to RFID.

Decisions on how to handle these four patents also stalled passage of EPCglobal Inc.'s Generation 2 standard from last fall until early 2005. Eventually, the group came up with a standard that can be implemented either with or without Intermec's patents. Yet if vendors want to use the patented technologies, they'll need to negotiate royalty payments with Intermec, according to Michael Meranda, president of EPCglobal US.

Beyond these four patents, Intermec also donated five patents to EPCglobal for use by the industry free of charge. Yet Winter said this week that these donations were "required" by the industry group.

Winter also said that Intermec has since been holding negotiation talks around the licensable patents with Symbol, as well as with a number of other RFID vendors.

But after talks between Intermec and Symbol faltered, Symbol filed suit against Intermec on March 10, charging violations of Symbol's 802.11 patents.

A couple of weeks later, Intermec fought back with another suit of its own, this time accusing Symbol of infringing six other patents for wireless access, terminal and software technology.

At the same time, Intermec also charged Symbol with breaching its contract with Intermec for laser scanning engines, a charge since denied by Phil Lazo, Symbol's vice president and general manager of RFID infrastructure.

"We did not breach our contract with Intermec. We were within our rights to discontinue the contract," Lazo said during an earlier interview.

But Intermec's Winter maintained this week that Symbol had no basis to unilaterally cancel the scanning contract.

"The contract did not allow for cancellation [by Symbol] for anything other than breach of contract on our part. The only way we could have breached the contract was by not payingand we didn't do that," Winter said

Yet Bernstein said this week that Symbol sees the situation quite differently. "The specific terms [of the contract] are confidential. But those just aren't the facts," the patent attorney said.

"The fact is that the agreement allows either party to terminate it if the other party sues it, for certain kinds of things. Intermec has continued to maintain the lawsuit that was originally against Matrics. Now, [that] lawsuit is against Symbol. If my customer is suing me, I don't want to be doing business with that company," Bernstein said.